In Digital and across channels, 2010 has brought with it something we haven’t seen since 2007: investment growth. Businesses are investing in building their customer base and growing top-line. The range is from cautious (3%-5%) to modest (5%-7.5%) with a few on the aggressive edge (+10%), but there is no more positive a sign than businesses putting cash back into their future.
Whether it’s the realization that expense cutting won’t grow profits, or investor pressure — private equity, venture capital or otherwise – for valuation and distributable cash increases, it’s all good for marketing. Depending on which group you’re listening to, private equity and venture capital investing is back in vogue and 4Q 2009 trends showed more deals than in the prior nine months. And, early stage venture capital is, again, finding its way into web 2.0 and 3.0 technologies which are early bellweather indications for the durability and sustainability of the investments.
Based on last month’s eTail show, Shop.org, this week’s SES conference and a recent technology summit I slipped into while staying in a NYC hotel, the number of exhibit hall booths from new companies is surging. Most won’t survive, but they’re pushing the status quo even at Google where new offerings are accelerating at an astonishing rate. Do check out the beta of Google’s new Search Funnels that allows advertisers to see through brand-assist keywords’ connection to trademark terms.
Although not an exhibitor anywhere, a new fave and current fascination is Polyvore, a voyeur’s fashion website birthed in 2007 with Matrix Partners, Benchmark Capital and Harrison Metal venture capital. While The New Yorker calls it “The world of virtual Anna Wintours”, I prefer Polyvore’s VP of product management’s description: “Our mission is to democratize fashion. To empower people on the street to think about their sense of style and share it with the world.” It’s passion, in a category that’s anything but casual, a user-generated content engine, on a social media platform, with easy-to-use tools where users can buy what they create (or, a look someone else designed), right now.
Equipped with clipping (“clipper”) and dressing tools for the 6.6 million people who visit PV each month, I can build my own looks (“sets”) swiped from designer websites, other user’s sets in their closets, and create what my mind wants to see. I’m no fashionista, but I’ve often said that there’s no excuse for bad shoes.
While the company is pointedly focused on building and installing a passionate user group, 2010 looks like the year they’ll accelerate their model. There’s little doubt in my mind that designers are going to rush their own sponsored sets and contests online for Polyvore’s customers. But turning this growing revenue base and user passion (people import 1.2 million products per month into their closets and sets) into a commerce destination is the tough financial question.
That Badgley Mischka cocktail dress with Jimmy Choo heels and Alex Sepkus arm candy is dead-on. Professionally, I’m rooting for them. It’s a game-changer for retailers. It has the easy-buying features of fashion auction sites but the American Idol intrigue that’s making aspiration appealing to the masses. Personally, it’s just good fun.
Somewhere out there, someone has to be cooking up a men’s version.
Chris Paradysz is CEO of PM Digital.
What is really interesting about spots like Polyvore is that, in essence, they are creating a presentation layer for fashion. By socially squeezing between the shopper and the seller and extending the experience into a cross-brand expedition, the style portals emulate the sensory experience of a real world department store. This is an exciting layer of interactivity and presentation that marketers should embrace. I think the Polyvore game is won through marketing partnerships and rev-shares rather than direct commerce, but the cross-marketer presentation layer is an exciting (also challenging) opportunity for marketers and retailer to rethink, re-imagine and recreate their relationships with consumers.
Good insight. I wish the partnership and rev-share piece would come true, but I struggle to see retailers essentially giving up gross margin points. With 6-10% pre-tax, every gross dollar reduces real profit and cash. I’m just never bullish on businesses giving up transaction dollars. I hope I’m wrong because creating new payment structures are the magic to opening up new, scalable opportunities.